Toxic Assets For Sale

Pimco’s withdrawl from the PPIP gives cause for thought. Essentially, the government is hiring investment banks to sell the crap to unsuspecting investors. This is a bad scene. The government is paying these nine firms to convince investors that this stuff actually has value. They’re being paid to market the junk assets - because nobody else can. Be prepared for more green shoot talk after this program is finalized. IB’s will start telling everyone how things are getting better - soon and why R/E is sooooooo cheap at current levels.

• Pimco’s withdrawal opens the field to competitors such as New York-based BlackRock, which said it plans to raise $4 billion to $5 billion from investors. The company is eligible for as much as $1.1 billion in government funds, according to Bobbie Collins, a BlackRock spokeswoman.
• The Treasury requires companies to raise at least $500 million from private investors within 12 weeks to participate. Pimco was interested in two parts of PPIP, one buying whole loans and the other managing funds that purchase mortgage-backed securities, Gross said in March. The Treasury delayed the portion of the program targeting whole mortgages last month.

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